Xiaomi (pronounced SHAO-mee) is a complete mystery in the West. We often hear stories about the "Apple of China" and how existing OEMs should be worried, but it's rare to get a look at any actual devices from the company. China is the world's largest smartphone market, and the #1 OEM in China isn't Samsung or Apple—it's Xiaomi. The company was only founded in 2010, but it sold 18.7 million smartphones in 2013. It expects to triple that number this year.

Why—and how—is this startup beating the biggest companies in the world? To discover Xiaomi's secrets and to investigate the state of Android in China, we imported the company's brand new flagship: say hello to the Xiaomi Mi4.

Xiaomi's greatest strength is its execution. A lot of things the company does are not unique, but Xiaomi does a fantastic job of whatever it puts its mind to. So yes, the front of the Mi4 (pronounced mee-four) is basically a big iPhone, but it's also built like an iPhone. A steel frame with chamfered edges, thin bezels, and impeccable construction make this the best Android hardware we've seen all year.

For the OS, Xiaomi uses a skinned version of Android called "MIUI" (pronounced me-you-eye). Lots of other OEMs skin Android—it's not an original idea—but again, Xiaomi's strength is in its execution. While many OEM skins are heavy and feel like they slow the phone down, MIUI is actually faster and smoother than stock Android. Xiaomi takes skinning Android seriously. It pushes out OTA updates every single Friday, and, just like CyanogenMod, MIUI is available for download. It can be flashed to more than a hundred different devices, including Xiaomi rivals like Samsung, HTC, Motorola, and LG.

Hardware as a distribution platform

On the inside, everything in the Mi4 is top shelf. It has a quad core 2.5GHz Snapdragon 801, 3GB of RAM, 16 or 64GB (!) of internal storage, a 3080mAh battery, and best of all, no silly gimmicks. Everything that is here is here for a reason; it works. Xiaomi even managed to out-spec-sheet Samsung's Galaxy S5 with more RAM (3GB vs 2GB) and a bigger battery (3080mAh vs 2800 mAh). A Galaxy S5 costs $700 unlocked, but the MSRP on a Mi4 is only about $320 (1999 Yuan).

Xiaomi doesn't do business in America, and it can never seem to make enough devices to meet demand. That makes getting a Mi4 into the US a little more complicated and expensive. Xiaomi normally sells its devices to consumers directly, but we had to go through an importer, which ended up costing $480. Even after the 50-percent markup, it still feels worth it compared to an unlocked Galaxy S5.

Xiaomi is frequently compared to Apple, but its business model is completely different. Apple makes most of its money from hardware. Xiaomi calls itself an "Internet company," more readily likening itself to Google or Amazon's Kindle Fire line. Xiaomi sells the devices for close to cost and makes money off of the ecosystem—imagine Google's Nexus business strategy as the basis for an entire company. That's why Xiaomi can sell a device with better specs than the Galaxy S5 for less than half the price.

Xiaomi doesn't just sell phones; it also makes tablets, smart TVs, Wi-Fi routers, and wearable fitness trackers. Xiaomi has its own software store, the Mi Market, which houses the usual apps and games. MIUI is highly customizable, and the company sells themes that completely change the look of the phone. Like with Google, users can make a "Mi account" and use Xiaomi-provided cloud services to sync contacts, photos, settings, and files across devices. There is even a "find my phone" feature.

Design—a mashup of Apple and Samsung

Whoa! There is a small Mi4 next to this normal sized one.

Ron Amadeo

Is that an iPhone 6?! Nope, it's just the Xiaomi Mi4.

Ron Amadeo

Sure all smartphones looks pretty similar now, but it's hard to defend Xiaomi's design decisions when it even uses Apple's old home button icon.

Ron Amadeo

The plastic seaming in the metal rim may be in different locations, but it's very reminiscent of the iPhone.

Ron Amadeo

The top is pure Apple, other than the "Mi" logo.

Ron Amadeo

The back is where Xiaomi takes a different approach

Ron Amadeo

It's still not unique though, the back looks just like a Samsung device.

Ron Amadeo

Ron Amadeo

Ron Amadeo

Xiaomi's approach to design doesn't seem to value uniqueness. If a design works well and looks good, Xiaomi will take it, and China's notoriously lax enforcement of intellectual property laws allows the company to do so with impunity. As a result, the Xiaomi's products tend to be a mashup of good designs from other companies, which still makes them good, just not original.

There are only so many ways to build a rectangle, but the front of the Mi4 is a little too close to the iPhone design for comfort. Sure, it also looks a lot like the Samsung Galaxy Alpha (and many would say that's too close to an iPhone, too). But it's the little things, like using a rounded square icon for the home button and identical earpiece, that really bolster the "copying" arguments. The back, meanwhile, looks identical to a Samsung device.

A product doesn’t have to be original to be successful, though. When everything is basically a rectangle, there aren't many areas where companies can really be different. Ragging on a device because it looks similar to another device feels like a waste of breath when the end result is so good. We're sure Apple's lawyers would see things differently, but the longer we use the Mi4, the more we just don't care about what Xiaomi's inspiration was for the design.

Enlarge/ Here's a good look at the bottom of the device, which houses a Micro USB 2.0 port and holes for the speaker.

Ron Amadeo

The star of the show is the stainless steel frame that surrounds the Mi4. Steel is about three times heavier than aluminum, which gives the Mi4 a satisfying heft. If you're the type that preferred the heavier iPhone 4s or Nexus 4 over their current iterations, you'll be happy with the Mi4.

The build quality on the Mi4 is great. The seams on everything are very tight, and there are no squeaks or creaks here. This $320 device feels just as expensive as a $600 device from other companies. We can't find a single area where Xiaomi has cut corners other than the welcome omission of silly gimmicks like a heart rate monitor or a second rear camera for faux depth-of-field.

The 5-inch, 1080p LCD on the Mi4 is gorgeous. The panel is bright with accurate colors, and it has excellent viewing angles. The display looks just as good as a 1080p screen on any other flagship, and it should, because it's made by the same display manufacturers. Xiaomi sources LCDs from Sharp and JDI (a joint venture of Sony, Toshiba, and Hitachi) just like everyone else in the smartphone industry.

Xiaomi's software allows you to switch the display temperature between three different temperature presets: cool, standard, and warm, and you can change the saturation between "brilliant" and standard.

Importing a phone from China has resulted so far in a surprisingly "normal" device, but we're about to run into our first oddity. Take a close look at the port on the bottom of the phone. It's a Micro USB port, but it isn't the usual trapezoid shape—it's a big rectangle.

What we commonly refer to as a "Micro USB" port or plug is really a "Micro USB-B" connector. Micro USB-A is a thing, the difference being that Micro USB-B uses the familiar trapezoid shape, while Micro USB-A is rectangle shaped. The Mi4 has a Micro USB A/B port, which accepts both connectors, and it ships with a Micro USB-B plug.

The downside to the crazy A/B port is that it's possible to fit a Micro USB-B plug backward into the opening of the port. How far down you go while backward depends on how brave/forceful you are, but it's probably possible to damage the pins in the middle of the port.

This is an officially recognized standard of the USB IF, so we really can't call it wrong, but it does make plugging the device in harder, since the plug fits in both ways pretty easily. Provided you get the orientation correct, the port will work with any of your existing cables, just make sure you get it right. The Mi4 doesn't support wireless charging, so you will be dealing with this oddity a lot.

The top half of the Mi4 houses Xiaomi's "Mi" logo, brightness and proximity sensors, an earpiece, and a massive 8MP front-facing camera.

One of the coolest parts of Xiaomi's marketing is that it is very transparent about where it sources components from, happily listing manufacturers and model numbers in the spec sheet. The front camera is a Sony IMX219, the first of many Sony components we'll run into.

Two years ago, you would have been happy to have this 8MP sensor as the main camera in a device. There is more to a camera than just the sensor, and unfortunately, the Mi4 is still using the same tiny pinhole lens that most front cameras use. There really isn't much room on the front of the device for anything bigger, but the tiny lens seems to negate most of the gain from the bigger sensor, producing the same muddy images you normally get from a front-facing camera.

The bottom of the face houses three capacitive buttons, which get just about everything wrong. First, they're backward. The normal layout, from left-to-right, is Back, Home, then Recents, but, like Samsung, Xiaomi chose to flip the order. The second issue is the use of a menu button, which is redundant given that modern apps have put the menu on screen since 2011.

The zombie menu button sticks around on Xiaomi devices because MIUI, the company's Android skin, requires it to bring up the menu in most apps. Until Xiaomi gets around to modernizing its packed-in apps, it looks like the menu button isn't going anywhere.

Menu buttons are not as bad as they used to be. In older versions of Android, having a menu button would hide the on-screen menu button in every app. Despite going on for several versions, this was apparently a bug that Google fixed. Now a Menu button doesn't hide the on-screen button, and the only real downside to it is harder access to Recent Apps. Apps that put options in the menu and then don't display an on-screen menu button are still a problem in MIUI, but that is the software's fault.

With no recent button, you're down to having to long press on the home button to bring up the recent apps list. iPhone users will definitely recognize that home button symbol, which has been shamelessly ripped right from an iPhone 4.

Enlarge/ The back of the Mi4. In the full-size picture, you can just make out the faint diamond pattern.

The back of the Mi4 looks a lot like a Samsung device, with the same squared-circle lens and LED placement that Samsung normally uses. In the picture to the left, you can also see a little hole above the camera, which is for the noise canceling microphone.

The rear camera is 13MP. Just like the front-facing camera, this was sourced from Sony. It's an Exmor IMX214, the same unit that sits in the OnePlus One. It's, again, a similar part to what you would find in most flagships, from the same manufacturer that everyone else uses.

The back is a glossy plastic, but it's a good plastic. It's very hard and doesn't have any give to it, and even after repeated handling it doesn't get too slimy. Plastic is a little disappointing given the steel frame, but Xiaomi is using a decent species of plastic that doesn't detract much from the premium feel of the device.

The back has a faint diamond pattern embedded in it that shows up when the light hits the back just right. It's reminiscent of what LG has done with the Nexus 4 and Optimus G. You can just barely make it out in the left thumbnail—try the full-size version.

The back of the Mi4 comes off, though not the way you would normally expect. There's no slot you can stick a fingernail in, and when we first saw the device, we weren't sure the back came off at all. The whole unit is very sturdy and feels like a solid brick that doesn't come apart.

In order to open the Mi4, you need... a suction cup.

Since the metal rim extends slightly above the back and the gaps are so tight, there really is no other way to get the back off. Just slap on a (not included) suction cup, pull up, and the back will come off. This is a pain in the butt to do, but the good news is you won't be doing it often. The Mi4 doesn't have a MicroSD slot, and despite the battery being exposed when you pull the back cover off, the battery isn't removable.

The back comes off so that the panel can be replaced. Xiaomi produces replacement plastic backs in a variety of styles, like wood, leather, and fur, and Xiaomi's devices are popular enough that other companies will make Mi4 backs, too. Customization is a core selling point of Xiaomi phones, and this extends all the way down to the software, which lets you theme just about any element of the Android-based OS.

Once you do have the back off, you'll notice that Sony makes the battery, too. There's no wireless charging—one of the few features the Mi4 lacks.

Ron Amadeo
Ron is the Reviews Editor at Ars Technica, where he specializes in Android OS and Google products. He is always on the hunt for a new gadget and loves to rip things apart to see how they work. Emailron.amadeo@arstechnica.com//Twitter@RonAmadeo